Search This Blog

Friday, 24 June 2011

NO LOAN IS CATASTROPHE SAYS ‘TIMES’

It is no wonder the Minister of Finance, Majozi Sithole asked the nation to pray for our loan with the African Development Bank (AfDB) to be approved; he knew we didn’t stand a chance of it being approved.

So, all the minister could do was to leave it to divine intervention, because government was nowhere near meeting any of the benchmarks set by the International Monetary Fund (IMF).

Consequently, this request, the minister confirmed yesterday, was rejected, although it is yet to be officially communicated.

This is a catastrophe for the hapless government, for if we can’t be granted a loan by the AfDB, the IMF surely will not give the letter of comfort, or any loan when it returns to review our situation in August. Besides that, if the AfDB says we have not satisfied the set targets, what chances that by the time the IMF reviews our benchmarks we would have met any of those targets required for us to get their approval?

This is hardly surprising, because our government has been in denial about this situation all along. Sadly, even the Parliamentarians do not seem to appreciate the monster that is facing this country right now. The MPs should be demanding that government speeds up the cuts it promised because they have to be made. Failure to implement the cuts is delaying the inevitable, and the more this is delayed, the bigger the cuts are going to have to be when that decision is eventually taken. That is the reality we have to accept—the party is long over, the IMF told us in February this year. And we are still living like it has just begun!

What our politicians are failing to comprehend is that sooner, rather than later, they will have no money from which their salaries will be cut; civil servants will not be paid; government operations will be grounded, and therefore the economy will implode. This country will become the real Zimbabwe, with a currency that will be worthless, especially when our Lilangeni will no longer be pegged with the Rand. What will they do then? By then it will be too late. By the way, if government is serious, the fattening ranches that are the boards and committees have to be cut.

Our economy is teetering on the brink of collapse, and the chaotic scenes in Greece, God forbid, will become common in our streets if we refuse to listen to the IMF, and do nothing to take the hard decisions.

Government is delaying the inevitable; it needs to act urgently, and stop being in denial.